Forest Oil To Reduce 2011 Spending

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Forest Oil, the Colorado-based independent oil and natural gas producer, said it will spend $600 million and $650 million on capital projects this year, 10% below a previous forecast, as the company focuses most of its exploration efforts on projects in Canada and Texas.

Forest Oil (FST) plans to boost its average annual net sales volumes by 10% this year. Cash costs are expected to range between $2.15 per 1,000 cubic feet equivalent and $2.35 per 1,000 cubic feet equivalent, which would be a 7% decline from the 2010 guidance, according to the Associated Press.

The company also said it plans to make an initial investment of $50 million for a project in the Eagle Ford Shale in South Texas. In December, Forest Oil announced the creation of Lone Pine Resources, a new company devoted to developing oil and natural gas projects in Canada.

Lone Pine will become the parent company of the firm that owns all of Forest's Canadian assets. Lone Pine plans to sell 19.9% of its common stock in an initial public offering that's expected to occur in the first half of this year, the AP reported.